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Net Radio Royalty Deadline Looms

NEW YORK (CelebrityAccess MediaWire) — Net broadcasters are running out of time to find a way to stave off the implementation of a royalty scheme that could cost them as much as a 300% increase in royalties for large stations and a huge 1200% increase for small operations.

The most recent setback was a rejection by the U.S. Court of Appeals of a stay with a tersely-worded decision stating "Petitioners have not satisfied the stringent standards required for a stay pending court review."

More troubling is the fact that the new royalties are effectively dated to January 1, 2006, meaning that virtually all the small and mid-sized net radio operations will be forced into bankruptcy.

SoundExchange had offered a voluntary cap of $2,500 per station, regardless of how many channels they operated, instead of the current $500 fee per channel, but the cap was only good until 2008. The proposal was rejected by the coalition of net broadcasters, DiMA (Digital Media Association.)

"Any offer that doesn't cover the full term is simply a stay of execution for Internet radio," said Jonathan Potter, executive director of DiMA in a statement. "The looming 2009 billion-dollar threat is destabilizing and inhibits investment and growth. A billion dollar 'minimum fee' is equally absurd in 2006, 2007, 2008, 2009 or 2010. It should be eliminated—period."

As of press time, Sunday remains the deadline for net radio. – CelebrityAccess Staff Writers